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CHART OF THE DAY: The Mortgage Refinancing Boom Is Evaporating Before Our Eyes

Mortgage rates have been climbing for five straight weeks, and the latest data from the Mortgage Banker's Association shows that the average 30-year fixed rate is now at 4.15%, up from 3.59% in the first week of May.

The rise in mortgage rates has been driven by concerns about when the Federal Reserve will begin to slow its $85-billion-a-month bond purchase program, which is designed to keep interest rates low. Those fears have sparked a sell-off in the Treasury market, which has caused yields on fixed income instruments of all shapes and sizes – including mortgages – to rise.

Obviously, the Fed doesn't want a rapid rise in rates. But how worried should the Fed be about the impact of tapering fears on mortgage rates, specifically?

"The rise in mortgage interest rates has the potential to generate a hiatus in housing sales and starts over the summer," Stansfield wrote in a note to clients. "At the margins, the rise also adds to the case for expecting the housing recovery to slow later this year. But mortgage rates are still too low to pose a serious threat to the recovery."

Remember, mortgage rates have only returned to levels seen in 2011 and early 2012. Moreover, the purchase applications index was "essentially unchanged from its average in the month leading up to the trough in mortgage interest rates."

Of course there is a lag in between rising mortgage rates and mortgage demand. So, the Fed will be watching.